Putin Takes Credit for Dodging ‘Deep Crisis’ as Slump Deepens

by Ilya ArkhipovHenry Meyer
June 19, 2015 — 7:45 AM EDT
Updated on June 19, 2015 — 8:12 AM EDT

President Vladimir Putin gave himself credit for avoiding the “deep crisis” that faced Russia last year as tumbling oil prices combined with sanctions over Ukraine to push the economy into decline.

“It hasn’t happened,” Putin said Friday in his annual address to investors at the St. Petersburg International Economic Forum, his premiere business event of the year. “We stabilized the situation.”

Putin, 62, is facing the biggest challenge of his rule as he juggles the fallout of a pro-Russian rebellion in Ukraine with the country’s first recession in six years. The Kremlin said yesterday experts will study a proposal by a close ally to move up presidential elections now slated for March 2018, a move that could extend Putin’s 15-year rule while his approval rating continues to hover above 80 percent.

The economic woes are being exacerbated by the continued conflict in Ukraine, which has provoked the worst confrontation between Russia and the U.S. and its allies since the Cold War. European Union governments have struck a preliminary agreement to extend economic sanctions against Russia by six months until the end of the year, two officials from the 28-member bloc said.

Gross domestic product contracted 2.2 percent in the first quarter from a year earlier, the first drop since 2009 and down from a previous estimate of 1.9 percent. The economy of the world’s largest energy exporter may shrink for two years in a row for the first time under Putin if oil stays at $60 through 2016, according to the central bank.

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http://www.bloomberg.com/news/articles/2015-06-19/putin-says-russia-s-economy-is-weathering-crisis-after-oil-slump